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CASE NAME HELD

1 Sudhir Gensets Ltd vs 28. This is also so provided under Section 74 of the
Indian Oil Corporation Ltd Contract Act. As such, the party claiming breach of
FAO 253/2008 contract is entitled to receive reasonable
compensation whether or not actual loss is proved
to have been caused by such breach. In view of
ONGC Vs. Saw Pipes wherever there is a pre-
determined amount for the damages, in such a
situation the said amount can be deducted by way
of liquidated damages by way of specified amount
payable by the respondent. Thus, if the
compensation is named in the contract by way of
penalty, consideration would be different and the
party is only entitled to reasonable compensation
for the loss suffered. But if the compensation
named in the contract for such breach is genuine
pre-estimate of loss which the parties knew when
they made the contract to be likely to result from
the breach of it, there is no question of proving
such loss or such party is not required to lead
evidence to prove actual loss suffered by him
2 Steel Authority Of India "We are not aware of any principle that once the
Ltd vs Gupta Brother Steel provision of liquidated damages has been made in
Tubes Ltd on 9 September, the contract, in the event of breach by one of the
2009 parties, such clause has to be read covering all
types of breaches although parties may not have
intended and provided for compensation in express
terms for all types of breaches."
3 In Chunilal V. Mehta &  the Constitution Bench considered Section 74 of
Sons AIR 1962 SC 1314 AIR the Contract Act and held that right to claim
1963 SC 1405 (2003) 5 SCC liquidated damages is enforceable under Section
705 (1994) 3 SCC 521  74 of the Contract Act and where such a right is
found to exist, no question of ascertaining damages
really arises. It was held that where parties have
deliberately specified the amount of liquidated
damages there can be no presumption that they, at
the same time, intended to allow the party who has
suffered by the breach to give a go-by to the sum
specified and claim instead a sum of money which
was not ascertained or ascertainable at the date of
the breach. While construing Clause 14 therein, the
Court held that by providing for compensation in
express terms, the right to claim damages under the
general law is necessarily excluded.

4 ONGC v. Saw Pipes (2003) 5 wherein a contract has provisions for liquidated
SCC 705 damages, such amount can be received in totality
Relied on Kailash Nath only if the amount of damages suffered by the
Associates v. Delhi aggrieved party is similar to such pre-established
Development Authority and amount of damages. The court further observed
 Another (2015), that the quantum of damages awarded by the court
should at no point exceed the amount mention in
the contract in the form of liquidated damages
MSK Projects (I) (JV) Ltd. Even in the presence of pre-determined sum of
v. State of Rajasthan (2011) reward as liquidated damages, the court will take
10 SCC 573 into consideration factors such as mitigation of
losses, reasonability of the sum, and other facts and
circumstances so as to ensure that the aggrieved
party is compensated adequately but not over
compensate so as to prevent any occurrence of
profit to the aggrieved party as a result of breach of
the said contract.
5 DDA v. Naraindas R. Israni There is no gainsaying that the amount of
(2007 Delhi HC) compensation payable under Clause 10CC is
limited to the increase in the prices of materials
and stores and/or wages of labour required for
execution of the work. The clause does not either
forbid the contractor from making a claim nor does
the same provide for any formula or mechanism
for determination of compensation on account of
factors other than those that are specifically
mentioned in the clause. This would necessarily
mean that if in addition to increase in the prices of
materials and stores and wages of labour required
for execution of the work, the contractor suffers
any damages on any other account as for instance
on account of idle plants and machinery,
scaffolding etc. or on account of blocked capital
resulting in loss of profit or staff either posted on
the work site or otherwise, he can make a suitable
claim for payment on that account. Any such claim
arising out of a breach of the agreement executed
between the parties can be examined and awarded
by the arbitrator depending on the evidence that the
contractor may adduce to prove any such loss.

6 Mohanlal Harbanslal A conjoint and harmonious reading of the

Bhayana & Company v. judgments cited by both the parties would lead us
UOI (2012 Delhi HC) to cull out the legal proposition to the effect that
whenever there is a provision in the contract within
the parameters whereof a particular claim falls,
said claim has to be adjudicated upon within the
four corners of the said contractual provision. It is
for the reason that the arbitrator has to take into
consideration the provision of the contract and he
cannot travel beyond the parameters of the
contract. If the award is given outside the said
contractual provision, it would amount to
exceeding the jurisdiction by the arbitrator which is
not permitted. A distinction has to be maintained
 between an error within the jurisdiction and an
error in excess of jurisdiction. On the other hand, if
the claim does not fall within the stipulated
contractual provision but is a claim for loss
suffered which can be granted under the provisions
of Sections 73 and 74 of the Indian Contract Act, it
would be permissible for the arbitrator to award
such a claim.
7 K.N. Sathyapalan (Dead) By Ordinarily, the parties would be bound by the
Lrs. v. State of Kerala & terms agreed upon in the contract, but in the event
Anr. (2006 SC) one of the parties to the contract is unable to fulfil
its obligations under the contract which has a direct
bearing on the work to be executed by the other
party, the Arbitrator is vested with the authority to
compensate the second party for the extra costs
incurred by him as a result of the failure of the first
party to live up to its obligations. That is the
distinguishing feature of cases of this nature and
M/s. Alopi Parshad's case (supra) and also Patel
Engg.'s case (supra). As was pointed out by Mr.
Dave, the said principle was recognized by this
Court in P.M. Paul's (supra), where a reference was
made to a retired Judge of this Court to fix
responsibility for the delay in construction of the
building and the repercussions of such delay.
Based on the findings of the learned Judge, this
Court gave its approval to the excess amount
awarded by the arbitrator on account of increase in
price of materials and costs of labour and transport
during the extended period of the contract, even in
the absence of any escalation clause. The said
principle was reiterated by this Court in T.P.
George's case (supra).